Their hands were going up and down like someone cleaning a chalkboard.
The scene was the New York Hilton last week on a rainy Monday morning when nearly everyone's cell phone had been sent an emergency alert that the city was under a flash flood and severe storm warning. But then given the zombies, Transformers and giant Stay Puft Marshmallow Man that all seem to alternate turns in attacking the city that never sleeps (who could?), was anyone really surprised?
But back to the other semi-surprise. An overflow crowd turned out in a meeting room at the hotel as part of CUNA's America CU Conference to get answers to "What does the future hold for credit unions?" But the standing room only crowd made it clear they had been sitting down when it comes to getting ready for that future. And it all took place with a little dose of irony, too.
Doug Benzine, VP-business and consumer publishing for CUNA, was leading the session that was based on the research CUNA does and the environmental scans that it publishes, offering insights into current trends and projections on what's ahead.
You Need A New Plan, Stan
"How many of you think reaching future members and Generation Y is important?" asked Benzine. Nearly every hand in the crowd went skyward.
"Does anybody have a specific strategy for new member growth?" followed up Benzine. Almost every hand fell into its respective owner's lap.
Those potential new members are likely to go from $2 trillion in overall wealth to as much as $28 million as they inherit wealth, said Benzine, making it clear why that market is worth chasing.
But what about another huge market, the unbanked and the underbanked? Again, Benzine asked his audience how many agreed those segments hold promise for growth? And again, nearly every hand was raised.
"Does anyone have an unbanked strategy in place?" asked Benzine. And once more hands dropped like he was seeking volunteers to mop the subway.
Benzine observed that credit unions need to be rethinking not just their approach to emerging or niche markets, but some bedrock assumptions about where future growth will come from.
"There has been transformative developments during the past 30 years...that have profoundly disrupted middle-class households," he said. "The future composition of the jobs market will splinter the middle class into multiple levels of income and financial security. A lot of the automatic membership growth in the manufacturing segment has disappeared and we're not sure if it's coming back. What's going to be the middle class of the future that's been the sweet spot for your credit union? It's different than what we've traditionally looked at."
So called "fringe bankers," said Benzine, are no longer on the periphery of financial services, and are "smack dab in the middle." That underbanked "niche?" It's 68 million households big. Many CUs, he added, are often surprised to find out how many of their own employees use a check casher.
Talk then turned back to chasing that youth market, with Benzine noting Gen Y was entering their prime borrowing years, although he noted many younger members are perfectly content to never have a car or a mortgage.
There was little disagreement that social media is key to reaching this group, but another of those shows of hands found only about six people in the room had ever sent a tweet. "Understand what Gen Y wants and how to deliver it appropriately," recommended Benzine. "This generation is nothing like its predecessors."
That few CUs really "understand" Gen Y, which shouldn't be surprising, argued one board member (and the room was almost all board members) who was on hand. "What is the problem? Look around this room. I don't see any young people in here. They're all over 50!" While the comment seemed to bother some people, he was right.
Before closing, Benzine pointed to research that found many members of Gen Y say saving is their top priority, but their actual savings are almost nil. That brought some chuckles from the audience, who were probably too busy raising and lowering their own hands to notice they engage in a few paradoxes of their own.
Kudos To Becker On Retirement
* I would be remiss were I not to acknowledge the retirement of Fred Becker this week as NAFCU's CEO. Becker arrived at NAFCU facing two obstacles: he was replacing a legend in Ken Robinson; and he was a CU "outsider." Over the past 14 years, however, Becker has steadily and successfully worked to the point no one remembers either of those things, which is the way it should be. Instead, he has helped lead NAFCU to growing membership from among FCUs and scored sufficient legislative wins that you can sometimes even forget there's that other trade group in town. If you're in Boston this week for NAFCU's annual meeting, make sure you offer-at the very least-a handshake and a thank you.
Frank J. Diekmann can be reached at firstname.lastname@example.org.